Gambling On Casino Cases

Since casinos came to Detroit in 1999, Norma Astourian and Virginia Or­manian haven’t been able to keep from giving them their money. Now they want that money back—plus extra for pain and suffering.

The women have filed suit in Mich­igan state court, alleging that they are compulsive gamblers who signed up for a voluntary program through which they were to be banned from casinos—and subject to ar­rest if found on the premises.

But both continued to gamble, anyway. In October, they sued three Detroit casinos for failing to keep them out, saying the casinos should not have allowed them in after they put themselves on the ban list. They allege breach of contract, among other charges, and are seeking class certification. What’s more, their attorney, Blaise Repasky of Wood­ha­ven, Mich., says he is investigating whether to file new cases in oth­er states.

The Detroit lawsuit is the latest in a growing number of cases brought by compulsive gamblers. The last five years have seen approximately a dozen such lawsuits against casinos by gamblers and, in at least one case, by a gambler’s spouse, according to David Stewart, a Washing­ton, D.C., lawyer who has defended casinos in three recent cases.

Plaintiffs lawyers rely on theories that range from premises liability to intentional infliction of emotional distress to racke­teering to a tort similar to dram shop liability. So far, courts have generally frowned on the suits, and all cases have been dismissed before trial. In one, the Chicago-based 7th U.S. Circuit Court of Ap­peals ordered a plaintiff’s attorney to show cause why he shouldn’t be sanctioned for filing a frivolous cause of action.

But plaintiffs lawyers and anti-gambling advocates say they aren’t giving up. On the contrary, they think the time is ripe for courts to start taking these cases seriously. Em­boldened by a recent certification of a class action brought by gamblers in Canada, plaintiffs attorneys in the United States say they intend to press forward.

Their theory is that compulsive gambling is a disease, much like alcoholism or drug addiction, and that casinos should not be allowed to profit from people’s illnesses. “You can’t take advantage of sick people,” says Evans­ville, Ind., lawyer Terry Noffsinger.

But defense lawyers say people are responsible for their own behavior, no matter how self-destructive. Gam­blers are adults, they argue, free to bet without interference by the casinos. “We have no business telling people what to do,” says Patrick Shoulders, lawyer for an Indi­ana casino.

One factor complicating matters for plaintiffs is that compulsive gambling is not as well-studied or as well-pub­­licized as other addictions. “There’s not much research on it and not much information out there,” says Las Vegas law­yer Sean McGuinness, co-chair of the Gam­ing Law Com­mittee of the ABA Business Law Sec­tion. “A lot of things are not very well-defined about who falls into this,” adds Mc­Guin­ness, who is on the advisory board of the Ne­­vada Council on Prob­lem Gam­bling.

VOLUNTARY EXCLUSION

The Michigan suit by Astourian and Ormanian is pred­­­icated on the state’s dis­as­so­ciated persons list. Mich­igan, like six other states, pro­vides that compulsive gamblers may voluntarily join a registry of people who are not allowed in casinos. Some casinos even maintain rosters in states that don’t require them.

In Michigan, enrollees may be arrested for trespass if they enter the casino. The casinos are also prohibited from extending credit or soliciting their patronage; any winnings of people on the list are to be confiscated and turned over to Michigan’s gaming board. The law also provides that if casinos recognize enrollees on the premises, the casinos are to eject them and contact law enforcement authorities.

But the plaintiffs say the casinos didn’t exclude them, even though on several occasions the casinos asked for their identification before paying their winnings. Repas­ky argues that the law mandating the list is mean­ingless: “What’s the purpose for the form? For the law?”

The casinos, which are seeking dismissal, note that the statute creating the disassociated persons list contains a provision stating that the legislation “does not create any right or cause of action on behalf of the individual whose name is placed on the list.”What’s more, they argue, another clause requires those who enlist to sign a waiver releasing the casino from any injury resulting from place­­ment on the list. A ruling on the dismissal motion was expected in March.

In another recent case, Williams v. Aztar Indiana Gaming Corp., 351 F.3d 294 (7th Cir. 2003), plaintiff David Wil­liams alleged a violation of the Racketeer Influenced and Cor­rupt Organizations statute based on mail fraud. There, in 1998 the casino learned that Williams had psychological problems after a friend sent the casino a letter stating Wil­­liams was a compulsive gambler with suicidal thoughts, the opinion says. The casino then sent Williams a letter banning him until he proved that gambling would “pose no threat to [his] safety and/or well-being.” But in 1999, Wil­liams returned and was admitted; afterward, the casino sent him marketing promotions in the mail.

In addition to racketeering, Williams also claimed breach of contract and breach of duty. A federal district court dismissed all counts, and Williams appealed some of the dismissals to the 7th Circuit—although not the racketeering dismissal.

Nonetheless, the appellate court found the rack­e­teering count frivolous, brought for the sole purpose of obtaining federal jurisdiction, and ordered Noffsinger to show cause why he shouldn’t be sanctioned. (That decision was issued Dec. 5; as of late February, the court had not yet ruled on sanctions.) Meanwhile, Noffsinger says he intends to refile in state court.

DRAM SHOP THEORY

In another recent case, Brown v. Argosy Gaming Co., No. NA 02-CV-0209-SEB/WGH, also in the Southern Dis­trict of Indiana, a gambler’s wife charges that her husband was depleting their savings at the casino. The district court dis­missed the case; an appeal is pending in the 7th Circuit.

The wife’s lawyer, Robert Newman of Cincinnati, anal­ogizes to the dram shop cases, arguing that the wife is an innocent party hurt by the casino’s continuing to take her husband’s money. Newman says the casino owes a duty to the wife, just as bars owe duties to innocent bystanders who are hurt by intoxicated patrons.

But defense attorneys say the dram shop analogy is misplaced. They argue that most dram shop liability arises from existing laws prohibiting bars from serving drunk patrons. Except for the seven with voluntary exclusion laws, most states have no provisions regulating whether addicts can visit casinos.

On a broader level, defense attorneys say, there is a significant difference between selling people shots and playing blackjack with them—namely, bartenders should be able to tell when someone’s intoxicated, but dealers have no similar objective criteria by which to tell when a gambler is in too deep.

“Problem drinkers slur their speech, they stumble,” says Shoulders, who represents Casino Aztar in the Wil­liams case. “What this man [Williams] lost in the course of his career is a comfortable evening for a millionaire.”

But what about Astourian and Ormanian, who told casinos they’re addicts by placing themselves on the excluded list? In their case, the casinos could have recognized them as compulsive gamblers—but only if they had taken steps to check their identification. Defense attorneys say doing so isn’t practical.

“Ask yourself: How likely it would be to monitor 20,000 people going through the door every day? Who would recognize them?” asks Robert MacAlpine of Detroit, who represents one of the defendants, MotorCity Casino, in the case. Most casinos, he says, do not require gamblers to identify themselves before entering.

Plaintiffs attorney Repasky counters that the casinos asked his clients to provide names, addresses, birthdates and Social Security numbers on the occasions that they won large jackpots. The casinos easily could have identified the women as being on the excluded list, he says.

EARLIER WAVE

The current crop of cases isn’t the first litigation between casinos and gamblers, Stewart says. In the late 1980s and early 1990s, there was another wave of cases—usually commenced by casinos against patrons who refused to pay gambling debts. These cases, Stew­art says, faded away after the 1995 decision by the 3rd U.S. Cir­cuit Court of Appeals, Hakimoglu v. Trump Taj Mahal, 70 F.3d 291.

In Hakimoglu, the gambler alleged that the casi­no was responsible for his unwise gambling by serving him too much alcohol. The Philadelphia-based 3rd Circuit rejected the argument, saying that New Jersey’s dram shop doc­­trine did not extend to casinos.

Still, much has happened in the legal world since 1995, including, notably, successful lawsuits against tobacco com­panies. In fact, both sides in the gambling suits see similarities to the tobacco cases: The plaintiffs say that casinos should be liable for promoting a potentially harm­ful product, much like cigarette manufacturers.

Defense lawyers also see parallels to the tobacco lawsuits, but they consider the likeness to be a further indication of plaintiffs’ willingness to blame big corporations for personal decisions.

“From a personal standpoint,” says defense lawyer Mac­Alpine, “I think that most of the excessive litigation we have in this country is the result of someone trying to avoid responsibility and blame someone else.”